U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21817 / January 14, 2011

On January 14, 2011, The Securities and Exchange Commission charged an upstate New York-based penny stock promoter and his affiliated website with fraud for failing to disclose that he was paid by certain issuers to promote their stock while simultaneously liquidating millions of his own shares for profits of at least $2.95 million.

The SEC alleges that Christopher Wheeler of Victor, N.Y., received compensation at various times in 2007 and 2008 to promote several thinly-traded penny stocks on his website, OTCStockExchange.com. Wheeler’s website claimed to “have compiled a long list of successful stock picks” and to afford investors the opportunity to “make a fortune.”

The SEC alleges that after receiving millions of shares in undisclosed compensation from the issuers, Wheeler featured the issuers’ stock on OTCStockExchange.com, recommended that investors purchase the securities, and posted lofty price predictions for the stock without any reasonable basis for those projections. Wheeler’s and OTCStockExchange.com’s promotional efforts often resulted in dramatic, but temporary, increases in the volume of shares traded and the price of the issuers’ securities. Once the prices were pumped in this manner, Wheeler simultaneously dumped shares from his personal brokerage account onto the market.

According to the SEC’s complaint filed in the U.S. District Court for the Southern District of New York, Wheeler profited from his undisclosed sales of the securities of Infinity Medical Group, Inc., Solei Systems, Inc., Cannon Exploration Inc., and China Jiangsu Golden Horse Steel Ball Inc. (which now operates as Santana Mining, Inc.). Wheeler caused at least $450,000 of the fraudulent proceeds that he received to be transferred to North Coast Advisors, LLC, an entity that Wheeler controls. North Coast Advisors LLC has been named as a relief defendant in the SEC’s complaint.

The complaint alleges that Wheeler and OTCStockExchange.com violated Sections 17(a) and 17(b) of the Securities Act of 1934, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission seeks permanent injunctive relief, joint and several disgorgement of ill-gotten gains with prejudgment interest, and the imposition of monetary penalties against the defendants. The SEC also seeks an order barring Wheeler from participating in an offering of penny stock, and an order that North Coast disgorge its ill-gotten gains.

The Commission acknowledges the assistance of the U.S. Attorney’s Office for the Western District of New York, the Ontario Securities Commission, and the Royal Canadian Mounted Police.